Kakanda Development Corp.

Kakanda Development Corp.

January 16, 2007 08:00 ET

Kakanda Development Corp.: Corporate Reorganization Complete

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 16, 2007) - Kakanda Development Corp. (TSX VENTURE:KDC) (the "Company") is pleased to announce that all tabled resolutions have been approved by the Company's shareholders at the Company's Special Meeting held on January 15, 2007.

One of the key resolutions passed at the meeting was the approval of the Company's corporate reorganization by way of Plan of Arrangement (the "Arrangement") to enable it to focus on two distinct business opportunities. The Arrangement includes the occurrence, among other things, of the following:

- StoneBridge Merchant Capital Corp. ("StoneBridge") subscribed for $957,000 of 5% convertible debentures of the Company;

- Transfer of the Company's assets and liabilities plus $943,000 of cash provided by StoneBridge to a newly incorporated entity Kakanda Resources Corp. ("Kakanda Resources");

- Existing shareholders of the Company will receive one share of Kakanda Resources for each share of Kakanda Development Corp.;

- Kakanda Resources will carry out the Company's current business of metals exploration;

- Outstanding stock options and warrants of the Company were cancelled and terminated and cease to represent any right or claim whatsoever, and new Kakanda Resources options and warrants were issued in their place on identical terms;

- The Company will be transformed into a business engaged in the energy industry and will change its name to KDC Energy Ltd. ("KDC");

- StoneBridge subscribed for 15,524,281 common shares of KDC for $103,000; and

- Upon implementation of the Arrangement, shareholders of the Company will hold:

(a) 100% of Kakanda Resources, and

(b) Approximately 53% of KDC.

The reorganization is subject to final TSX Venture Exchange ("TSXV") approval and the approval of the Supreme Court of British Columbia which will be sought on January 17, 2007.

The Company received conditional approval from the TSXV on December 13, 2006. Upon completion of the Arrangement, expected to be at the close of trading on January 19, 2007 holders of the Company's shares will receive, in place of their existing shares, one (1) new share in Kakanda Resources and one (1) new share in KDC for every share held. Holders of the Company's warrants will receive, in place of their existing warrants, one (1) new warrant in Kakanda Resources for every warrant held with an exercise price of $0.30 per share. Holders of the Company's stock options will receive, in place of their stock options, one (1) new stock option in Kakanda Resources for every stock option held with an exercise price of $0.12 per share.

The shares of KDC will be voluntarily delisted from the TSXV and reinstated once KDC meets applicable minimum listing standards. Mr. Ickbal Boga will continue as a director and will be joined by Mesrs. Rod Maxwell and Jay Zammit, Mr. Maxwell is the Managing Director of StoneBridge while Mr. Zammit is a partner with the law firm of Burstall Winger LLP.

The shares of Kakanda Resources Corp. have been conditionally approved for listing on the TSXV and it is expected that they will trade on the TSXV immediately following completion of the Arrangement under the symbol "KRC". Ickbal Boga, Zachery Dingsdale, Kenneth Macleod and Steve Smith will continue as directors of Kakanda Resources Corp.

Steve Smith, President of the Company commented: "We are very pleased about the outcome of the vote. This is the first step towards creating a stronger company. In addition to shareholders interest in Kakanda Resources Corp., shareholders will also benefit by having exposure to the energy industry, through KDC Energy Ltd., at a time of high energy prices.

On Behalf of the Board,

Kakanda Development Corp.

Steve Smith, President

Contact Information

  • Kakanda Development Corp.
    Steve Smith
    (604) 642-0115
    (604) 642-0116 (FAX)
    Email: steve.smith@telus.net